Open research questions in Global Financial Crisis and Policies

What the literature leaves open

• The dollar shortage debate—Paul Samuelson called it “the big open question of our time”—dominated international macroeconomics in the 15 years following the end of World War II.

  Retrospectives: The Great Dollar-Shortage Debate · 2026 · DOI

• Abstract A large body of macroeconomic evidence suggests that volatility is detrimental to eco-nomic growth, yet micro-level evidence remains scarce, particularly for volatility stemming from fiscal policy.

  The costs of fiscal volatility: Evidence from firm-level data in developing countries · 2026 · DOI

• While observers frequently warn that BSAs may induce moral hazard, systematic theoretical and empirical assessments remain scarce.

  Moral Hazard in the Global Financial Safety Net: Evidence from Bilateral Swap Agreements · 2026 · DOI

• For recipient countries, however, the jury is still out: it remains to be seen whether the gains from China’s lending— through growth and improved infrastructure—will outweigh the more immediate burdens of debt service or the multifaceted costs of default.

  China’s Lending to Developing Countries: From Boom to Bust · 2025 · DOI

• Finally, we find very limited evidence that asset managers use their voice to influence corporate governance and macroeconomic policy.

  International financial subordination in the age of asset manager capitalism · 2024 · DOI

• The purpose of this paper is to examine the growth and structure of Australia's foreign debt, gross and net. The importance of this topic lies in both the rapidity with which this debt has grown since the beginning of the 1980s and the debt servicing obligations arising from these recent past accumulations. An understanding of the issues requires a detailed scrutiny of the structure of this foreign debt, a task not helped by the paucity of data on its maturity structure! The reasons for the growth of foreign debt and the policy implications are not the province of this paper. These have been canvassed elsewhere (Hogan 1987). Suffice it to say that there is nothing wrong in drawing upon foreign savings to expand the growth of productive capacity in Australia, or any other country, beyond what might be achieved with domestic savings alone. What is and remains worrying in the Australian situation is the way those foreign borrowings have been used to sustain consumption spending. Future consumption levels must be reduced over what they would otherwise have been in order to meet debt service charges-both interest and principal repayments. Dominance of short-term concerns, political as well as economic in their focus, has made future well-being hostage to fortune, and the perceptions of those foreigners funding Australian debt. Those perceptions are central to conduct of an effective debt management policy over the next few years. A Japanese view is blunt about the general macroeconomic setting for the rest of this decade: As long as Australia continues to borrow to finance its current-account deficit, the country will not be able to break out of the vicious circle of a worsening current-account deficit and increased external debt. As things stand now Australia will have no choice but to learn to live with a lower level of domestic consumption in order to redress its external imbalances. (Nomura Research Institute 1987, p. 22) * Professor of Economics, University of Sydney. With minor changes, this paper was published as No. 4, 1987, in the ACClWestpac Economic Discussion Papers (Australian Chamber of Commerce, Canberra). 1. The Australian Bureau of Statistics is expected to release a more comprehensive series on maturity structure in recent years during September 1987. 65 In its 1984/85 Annual Report the Reserve Bank of Australia expressed similar thoughts even if stated somewhat more delicately. No less significant are the US commentaries, especially those addressed directly to the foreign debt issues. Material offered by Goldman Sachs (1987) in a n assessment of the Australian debt issue is a doomsday prospect. The purpose of the exercise should be understood for its significance: to offer guidance on the proportion of $A debt to be held in lenders’ portfolios. The main thrust of this analysis is to determine the cond

  AUSTRALIA'S FOREIGN DEBT · 1987 · DOI

• The study identifies a gap in the understanding of connectedness and portfolio applications among investment instruments in Türkiye. The study highlights the need for dynamic portfolio strategies that consider market conditions.

  Connectedness and portfolio applications across asset classes: evidence from Türkiye under high inflation, exchange rate volatility, and macroeconomic fragility · 2026 · DOI

• From a strategic perspective, it is found that hedge ratio-based approaches are insufficient for reducing risk, especially during periods of heightened market stress, and can even increase portfolio variance by producing negative HE values.

  Connectedness and portfolio applications across asset classes: evidence from Türkiye under high inflation, exchange rate volatility, and macroeconomic fragility · 2026 · DOI

• The paper identifies the challenge of limited capital mobility restricting the prospects for economic growth. It also notes the challenge of imperfect capital mobility, which can restrict capital flows due to foreign investment concerns such as risk and reduced control. The paper highlights the challenge of home bias, which discourages international capital movements.

  Capital Mobility in the APEC Region: A Consumption-Based Approach and New Empirical Evidence · 2026 · DOI

• The traditional investment–saving framework has limitations in capturing how capital actually moves across borders. There is a gap between formal financial liberalization and actual capital movement in practice. The paper identifies a need for a consumption-based approach to address these limitations.

  Capital Mobility in the APEC Region: A Consumption-Based Approach and New Empirical Evidence · 2026 · DOI

• The paper identifies a gap in the literature on the design and implementation of Bond Stabilisation Funds. The study highlights the need for precautionary design and calibration of participation incentives.

  Bond Stabilisation Fund (BSF) in Indonesia: Lessons Learned and Its Precautionary Measures · 2026 · DOI

• The degree to which macro-financial risk factors are decoupled from portfolio investment flows is still under-researched. The literature fails to explore a full discussion of nonlinear interactions in Threshold Autoregressive frameworks.

  MACRO-FINANCIAL RISK TRANSMISSION AND NET PORTFOLIO CAPITAL INFLOWS IN G7 ECONOMIES: EVIDENCE OF STATE-DEPENDENT DECOUPLING AND NONLINEAR RISK ANALYSIS · 2026 · DOI

• High costs, low efficiency, limited transparency, and complex intermediation in cross-border payments. Fragile consequences from the cross-border expansion of CBDCs in emerging market and developing economies.

  The Impact of Global Central Bank Digital Currency Policies on Cross-Border Capital Flows · 2026 · DOI

• The international effects of CBDC policies are not well understood. The impact of CBDCs on cross-border capital flows is a relatively new area of research.

  The Impact of Global Central Bank Digital Currency Policies on Cross-Border Capital Flows · 2026 · DOI

• Future research could examine the impact of geopolitical risk on other financial markets. Future studies could investigate the role of other safe havens in major national markets. Future research could explore the effects of geopolitical uncertainty on national currencies in different economic conditions.

  The Geopolitical Risk Footprint on Inflation-Led Money Dynamics: Developed Versus Rising International Currencies · 2026 · DOI

• The study identifies a gap in the understanding of the dynamic interplay between geopolitical risk and developed as well as rising national currencies. The study notes that prior research has not fully examined the impact of geopolitical uncertainty on international currency markets.

  The Geopolitical Risk Footprint on Inflation-Led Money Dynamics: Developed Versus Rising International Currencies · 2026 · DOI

• The economy's complexity and nonlinear dynamics. The need for a new theoretical framework to understand economic breakdowns. The challenge of applying catastrophe theory and chaos theory to macroeconomic processes.

  A Nonlinear Dynamic Systems Analysis of the Bulgarian Economy in the 1990s · 2026 · DOI

• The lack of conceptual clarity in the historiography of Bulgaria's transition. The need for a nonlinear dynamic systems perspective to understand macroeconomic processes in Bulgaria during the 1990s.

  A Nonlinear Dynamic Systems Analysis of the Bulgarian Economy in the 1990s · 2026 · DOI

• Further research can investigate the relationship between ESG performance and sovereign borrowing costs in other contexts. The study of the social dimension of ESG performance can be further explored. The use of other methodologies, such as panel cointegration or classical causality analyses, can be considered.

  Sustainability Signals in Sovereign Risk Pricing: Panel Evidence from Emerging Economies · 2026 · DOI

• There is a lack of understanding of the role of ESG performance in the pricing of sovereign borrowing costs. The relationship between ESG performance and sovereign bond yield spreads is not well studied.

  Sustainability Signals in Sovereign Risk Pricing: Panel Evidence from Emerging Economies · 2026 · DOI

• The paper identifies a gap in the understanding of the marketability of the CHF/PLN offer rate. The research aims to fill this gap by assessing the margin policy of selected banks.

  Kurs franka szwajcarskiego w wybranych bankach w Polce w kontekście kredytów hipotecznych · 2026 · DOI

• The gap between Bulgaria's early success with the currency board and its unusually long trajectory to EU accession and euro adoption.

  Bulgaria’s Path to the Euro: The Role and Legacy of the Currency Board · 2026 · DOI

• Future research could explore the implications of the Quartet's views on exchange rates for contemporary debates on international monetary reform. Future research could examine the role of other economists and policymakers in shaping the evolution of the profession's position towards increased exchange rate flexibility.

  “The Quartet” and Reform of the Exchange Rate System, 1945–73: A Reconstitution · 2026 · DOI

• The paper identifies a gap in the existing literature on the Bretton Woods system and its successor, particularly with regards to the views of the Quartet on exchange rate regimes. The paper highlights the need for a more nuanced understanding of the evolution of the profession's position towards increased exchange rate flexibility.

  “The Quartet” and Reform of the Exchange Rate System, 1945–73: A Reconstitution · 2026 · DOI

• There is a need for a comprehensive and detailed examination of the interdependent relationships between external debt, economic growth, and trade openness. Prior work has produced mixed results on the impact of external debt on economic growth.

  The Impact of Economic Growth and External Debt on Turkey's Trade Openness in the Context of Global Accounting Integration · 2026 · DOI

Most-cited papers in Global Financial Crisis and Policies

• Credit Cycles · Journal of Political Economy · 1997 · 4,595 citations
• The Twin Crises: The Causes of Banking and Balance-of-Payments Problems · American Economic Review · 1999 · 2,507 citations
• The saving and investment nexus for China: evidence from cointegration tests · Applied Economics · 2005 · 2,504 citations
• The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988 · The Quarterly Journal of Economics · 1991 · 1,647 citations
• Domestic Saving and International Capital Flows · The Economic Journal · 1980 · 1,556 citations
• Fear of Floating · The Quarterly Journal of Economics · 2002 · 1,521 citations
• A Macroeconomic Model with a Financial Sector · American Economic Review · 2014 · 1,515 citations
• The Endogenity of the Optimum Currency Area Criteria · The Economic Journal · 1998 · 1,481 citations
• Risk Shocks · American Economic Review · 2013 · 1,207 citations
• The determinants of cross-border equity flows · Journal of International Economics · 2004 · 1,177 citations

Most recent work

• USD hegemony, bitcoin, Central Bank Digital Currency and the geopolitics of money · Journal of Post Keynesian Economics · 2026
• Stablecoins: Fundamentals, emerging issues, and open challenges · International Review of Economics & Finance · 2026
• Global shocks and the debt‐growth nexus · Economic Inquiry · 2026
• Sovereign debt pricing with shifting long-run growth expectations · European Economic Review · 2026
• Inflation targeting and financial stability: a cross-country comparison of emerging and developed economies · Journal of Economic Studies · 2026
• Foreign Exchange Intervention with UIP and CIP Deviations · Review of Economic Studies · 2026
• Stock market development and economic growth: The role of institutional quality · Borsa Istanbul Review · 2026
• The Dollar during the Great Recession: The Information Channel of U.S. Monetary Policy and the “Flight to Safety” · The Journal of Finance · 2026
• Fiscal shocks and the surge of inflation · European Economic Review · 2026
• Can dollarization mitigate the macroeconomic cost of populism? Lessons from Latin America · World Development · 2026

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